Stocks waded cautiously higher this morning in light volume as another bout of elections uncertainty put renewed selling pressure on the market. Investors are now waiting to hear oral arguments before the
U.S. Supreme Court
, scheduled to begin at 11 a.m., in a GOP appeal of Florida's Supreme Court ruling on Friday. The Nasdaq was lately making its way north, while the Dow was struggling around the flatline.
Just when it seemed the election mess was nearing a resolution in favor of
, the Florida Supreme Court on Friday ordered immediate hand counts of 9,000 disputed ballots in Miami-Dade County -- a victory for Al Gore. But the U.S. Supreme Court subsequently issued a stay of that ruling until a Bush appeal could be heard today.
Large-cap tech bellwethers were up, with weakness in PC-makers countered by strength in semiconductors such as biotechs and networking stocks. Network computer maker
, the most actively traded stock on the Nasdaq this morning, continued falling, however. The stock rode lower on its fourth day of selling this morning as it continued to erase gains won in a previous rally. Sun was lately off 7.1%.
was down after
lowered its rating on the company to long-term attractive from buy and dropped its earnings per share estimates for this year and next. The securities firm cited a soft e-advertising market.
But many of the other actively traded tech bellwethers were edging higher, including semiconductor goliath
and software giant
, among others.
In the broader market, interest-rate sensitive financials were rallying for a second-straight day.
was the strongest gainer to the upside on the
Dow. J.P. Morgan was up 3.3%, adding 29 points to the Dow's upside.
Other blue-chip industrials were mixed, with weakness in retailers and consumer products companies such as
Procter & Gamble
Retailers were getting hit again after home improvement retailer
warned this morning that it expects to miss earnings per share and same-store sales estimates for the fourth quarter. The company, which blamed slowing sales, now sees earnings of 40 cents to 42 cents per share for the fourth quarter. Lowe's was lately up, though, higher by 2.98%. Investors have beaten up retail shares of late on concerns that consumer spending is slowing, which will hurt crucial holiday sales.
Elections uncertainty has thrown a long shadow over the market in the past several weeks, and the most recent developments put a little damper on optimism generated last week. Growing expectations of an interest rate cut in the near future and
ability to rally Friday despite a profit warning gave a solid boost to market sentiment last week.
In fact, some strategists -- convinced that the
Fed will cut rates in the next few months -- are counseling that now is the time to buy -- particularly interest-rate sensitive stocks such as financials, tech, telecom and health care stocks. In a report issued this morning,
Credit Suisse First Boston
recommended buying stocks in these groups and said that if the Fed cuts interest rates in January or February, it would be just the first of several cuts.
Ed Kerschner also issued a bullish report, calling the current market one of five most-attractive buying opportunities of the past 20 years.
Widespread optimism over an interest-rate cut was first generated last week after
Alan Greenspan said inflation was no longer his primary concern and hinted that he might act if the economy showed signs of slowing too severely.
Certainly, some finality on the elections front would help.
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Interest-rate sensitive stocks continued a rally begun last Friday as expectations of a Fed interest-rate cut grew on Wall Street. Brokerage stocks such as
were rising, up 9% and 2.7%.
Investors have been cashing out of financial stocks in recent weeks amid growing concerns over declining credit quality and what that might do to earnings.
American Stock Exchange Broker/Dealer Index
was rising 2.6%.
Bank stocks were also rising. The
Philadelphia Stock Exchange/KBW Bank Index
was up 2.4%, partly led by
, up 4.8%, and
, 3.7% higher.
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Treasuries were giving back the gains they made late in the day on Friday, reflecting the shift that occurred over the weekend in the presidential contest.
The benchmark 10-year
Treasury note lately was down 10/32 at 102 24/32, lifting its yield to 5.381%.
Treasuries rallied on Friday afternoon after the Florida Supreme Court ordered ballot counts in Florida, a development with the potential to benefit Democratic candidate
. The bond rally was based on the prospect of continued stock market declines while the outcome of the election remains in doubt, and on the belief that Gore would do more than Republican candidate
George W. Bush
to reduce the supply of Treasury securities by using federal government surpluses to pay down the national debt.
The Treasury market was giving back those gains after the U.S. Supreme Court on Saturday ordered the recounts halted, a development that favored Bush.
A rally in the stock market was also sapping demand for bonds. No major economic news is slated before Wednesday, which brings the November
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